By Nnamdi Odumody
Most of the focus by companies and organizations when making investment decisions are based on the consumption economy which targets existing consumers that have the capacity to purchase products available in the market. Innovations such as those which sustain existing product innovations and those which improve efficiency such as those of the Fourth Industrial Revolution like Robotics, Internet of Things, etc, do not create new markets or enhance prosperity as they don’t create new jobs, rather they eliminate the need for some of them.
But immense opportunities for wealth creation exist in the non-consumption economy which focuses on why potential consumers cannot purchase and use products or services. Four barriers are responsible for consumers not consuming products which will enhance their progress. They include not having the skills necessary to consume existing products available in the market, lack of purchasing power to afford the existing solutions in the market, inaccessibility of existing products to reach potential consumers, and time constraints which prevents non-consumers from benefiting from using available solutions.
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Nonconsumption is the inability of an entity (person or organization) to purchase and use (consume) a product or service required to fulfill an important Job to Be Done. This inability to purchase can arise from the product’s cost, inconvenience and complexity, along with a host of other factors—none of which tend to be limitations for the rich, skilled, and powerful in society. For its part, a Job to Be Done arises when an entity is struggling to make progress in a particular circumstance, such as when someone gets sick and tries to recover. If there are not adequate facilities that can aid their speedy recovery, then that person is a non-consumer of basic health services.
Customer dissatisfaction from consumption of existing products or services is another key determinant in why people will prefer to remain as non-consumers. An understanding of what your product or service will do to the customers who are purchasing it is essential in determining whether your innovation will succeed in the marketplace.
More than 85 percent of Kenyans didn’t have access to financial services before the introduction of Safaricom’s MPESA mobile money platform which enables the storage, transfer and saving money without owning a bank account. MPESA has enabled more than 22 million Kenyans to perform financial transactions and access loans as well as insurance. It processes about $4.5 billion in monthly transactions and has created jobs for more than forty thousand agents.
Alibaba knew that the culture of its Chinese consumption market was different from the West where Amazon was dominant. It decided to create a niche that would allow merchants of Chinese products to sell directly to potential consumers which resulted in jobs for ten million small business owners and billions of dollars in revenues.
Emerging market economies such as Africa, Middle East and Asia have immense potentials for savvy entrepreneurs who target the next billion consumers at the base of the pyramid in these markets that desire products and services to help them achieve prosperity.